Don't rush into a property deal - tick all the boxes
“I’ve got it!” exclaims Freddy as he hurries over to the door where his daughter is standing. “After all these years I’ve finally found it!”
“You’ve found what?” replies Pebbles as she enters the room and puts her things down.
“At the top of the page, the big one,” commands Freddy as he excitedly shoves a brochure under her nose.
As Pebbles reads she can’t help but notice a very legal looking document on the kitchen table. What has he done now, Pebbles thinks to herself as she studies the brochure and the modest, but tastefully-designed, residential property at the top.
“I’m going to make an offer!” exclaims Freddy, seemingly unable to contain himself for a moment longer.
“Where has this come from, Dad?” asks Pebbles, somewhat taken aback.
“I’ve been wanting a change for a while now, but haven’t been able to find something which takes my fancy. Until I saw this property the other day and it’s absolutely perfect.”
“But what about the farm?”
“What about it,” replies Freddy with a grin. “The new property is literally down the road! I’ll just rent the farm house to John and move everything to the new place. It’s perfect.”
“Are you sure about all this, Dad? You’ve been in this house for years.”
“Exactly. It’s time for a change,” replies Freddy. “I’ve even signed an offer.” He adds, glancing towards the table.
“Dad!” cries Pebbles, as she marches towards the table and picks up the contract. “And when were you planning on telling me?”
“I’ve told you just now. Don’t worry; it’s a very standard purchase,” assures Freddy.
Absolutely amazed as to why her father was being so casual with the legal aspect of what he’s claiming to be the house he’s always wanted, Pebbles dives straight into lawyer mode.
“I can see here that’s its subject only to a LIM. What about a Builder’s Report and finance?”
“I’ve already looked at the house and it’s fine. I don’t need to get a Builder’s Report,” replies Freddy. “And finance has already been approved.”
“Really?” replies Pebbles, impressed by her father’s pro-activeness. “Where’s the Bank’s letter of approval?”
“I haven’t got a letter from them, I just spoke to Jim at the Bank and he said it will be fine.”
“Dad, you need to get something more than just that. If the vendor accepts your offer and the Bank decides not to lend, you’ll still be contractually obliged to buy the house – even if you’ve got no money.”
Turning now to concern for her father and what she knows will involve a large chunk of his life savings, Pebbles continues. “I want you to go see your lawyer about this. I know it all looks simple on the face of it but there is a lot involved in buying a house and there’s potential for you to get into a very bad situation if it falls through.”
“Can’t you just go through it with me?” asks Freddy with a hopeful look.
“No Dad, you need some proper objective advice. I’ll help; but buying a house is a big deal so I want you to see your own lawyer before making a formal offer, ok?”
“Ok Pebbles,” says Freddy. “But we need to be quick as I don’t want to miss out!”
The content of this document is necessarily general and readers should seek specific advice on particular matters and not rely solely on this document.
If you would like more information on any of the topics in this document, please contact your usual Auld Brewer Mazengarb & McEwen adviser.